Are there any brokers that would allow short selling without requiring you to use Margin? This stupid 25k rule thing is making it hard to be in the short side if you are a day trader.
http://www.sec.gov/answers/shortsale.htm Short sales must be on margin. You have to borrow the stock before you sell it. The brokers do not have a choice - it's a rule.
Thank you for your prompt reply. I have an account with Datek which dipped a couple of thousands below the 25k prompting them to issue a day trading call for $19000- Called them to find out how they dreamed that figure up and they gave me non-convencing complex set of arithmatic on how the do these calculations. The end result is that my account balance now stands at 30000 plus, but, I still can't do any short selling- Datek say I still have to come up with another $9000, or wait 90 days, before I can have my margin status back and be able to short sell. I think this 25k rule thing marks the begining of the end for the US stock markets as we used to know them.
There is a PDT rule discussion here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=1938&perpage=6&pagenumber=1 If you don't want to deposit the $9K or lose margin, you also have the option of transferring your acct elsewhere.
The PDT Rule: http://www.nasdr.com/filings/rf00_03.asp A <b>proposal</b> about options & margin: http://www.nasdr.com/filings/rf00_15.asp You may wish to contact the nasd.
Did he mean does the PDT Rule Apply? e.g. could a non PDT-designated trader cover an intraday position with options, thus avoiding the "day trade" that could push the trader into the PDT classification?
I'm no expert compared to the rest here but it seems to me this is yet another logical reason to have more than one brokerage account. Unless there's some cross checking (how?) you can spread your day trades out to keep under the min. round trips per 5 days at each brokerage. I say "another reason" after reading all the service outage horror stories from the options and futures traders.